So where will all that 'legal' pot come from? Sale of pot stymied

Washington State's new law makes it legal for adults to possess up to an ounce of marijuana, but some speculate the federal government will prosecute those who use marijuana on federal land because federal law prohibits marijuana use. NBC's Kristen Dahlgren reports.

By M. Alex Johnson, NBC News

Washington and Colorado say you can legally smoke marijuana for fun now, but here's the catch: You can't legally buy it.

Voters in those states passed initiatives last month to legalize recreational use of marijuana. As of last Thursday, it's legal under Washington law for anyone 21 and over to possess up to 1 ounce of marijuana, 16 ounces of "solid marijuana-infused product" (in other words, a pound of pot brownies) or 72 ounces of "marijuana-infused liquid."

In Colorado, Gov. John Hickenlooper signed Amendment 64 to the state Constitution on Monday, legalizing not only recreational use but also home growing, unlike in Washington.

Entrepreneurs are already planning stores to get more buck for the bhang.

"Part of the mission of our company is to transform marijuana from a back-alley drug being sold by criminals into a premium product being enjoyed by responsible adults," said Jamen Shively, chief executive of Diego Pellicer Inc., a new company that hopes to open a chain of stores in Washington and Colorado as soon as the legal issues are cleared up.

The company is named for Shively's great-grandfather, who grew hemp in the Philippines. It eventually became the biggest hemp supplier in the world around the turn of the 20th century. ("It's a family business," said Alan Valdes, a veteran securities trader who recently joined the company as chairman.)

"We're creating the category of premium marijuana," said Shively, who worked as a corporate strategy manager for Microsoft Corp. from 2003 to 2009 before leaving for a specialty food startup. "If you are producing or intending to produce premium-grade product that's in line with our ethos, we're interested in talking to you."

The federal government still insists that marijuana is a Schedule I controlled substance and that buying and selling it for any purpose remains a federal crime. Federal authorities officially even frown on the pot that patients get at medical marijuana dispensaries, although their policy is to look the other way in those cases.

For recreational users, well, "you're a felon," said Mark A.R. Kleiman, editor of the Journal of Drug Policy Analysis. "Period. End of paragraph."

And so is your retailer.

"Regardless of any changes in state law ... growing, selling or possessing any amount of marijuana remains illegal under federal law," said Jenny Durkan, the U.S. attorney in Seattle. She said the Justice Department is reviewing its options in Washington and Colorado.

Shively said that under no circumstances would his company violate federal law.

"Let's suppose tomorrow that Washington state issued licenses and said, 'Go ahead, guys, have at it.' We would say to the state of Washington respectfully, 'Thanks, but no thanks, because we haven't heard from the federal government.'"

Until then, Diego Pellicer is rounding up funding and private shareholders to be ready if and when the Justice Department changes course.

"I think it's going to be hard for the Obama administration to slap this down," Valdes said. "Washington is a liberal Democratic state that helped (President Barack Obama) get elected. The people voted for him — it would be a slap in the face."

Dan Satterberg, the prosecuting attorney in King County, Wash., which is home to a thriving marijuana scene in and around Seattle, thinks the Justice Department will try anyway.

The Washington and Colorado laws require state agencies to facilitate something the federal government considers an illegal act — the sale and distribution of marijuana. That raises an important states' rights question that only the courts can sort out, he said.

Satterberg told NBC station KING of Seattle that he expects the states and the Justice Department to wind up before the U.S. Supreme Court within the next couple of years to argue the issue.

Overlooked in the immediate reaction to passage of the initiatives, both pro and con, is an important public health question, said Kleiman, who is a professor of public policy at the University of California-Los Angeles and co-author of "Drugs and Drug Policy: What Everyone Needs to Know."

It's not the question you might expect — how much does legalization increase marijuana use? — but "how much does legalization increase abuse?" he told NBC News.

Assuming marijuana use follows the pattern of alcohol use, most of the marijuana consumed in the U.S. is used by the 20 percent minority of people who abuse it, he said. Most pot users use it now for light recreational purposes, but if it's legal, how big will that 20 percent grow?

"Nobody knows," he said.

Questions like that are why it might, in fact, be wise for the federal government to step back and let Washington and Colorado serve as laboratories, so policy makers can "find out what happens."

"We are building our entire business on the premise it will be sufficiently legal in the next few months or a year," Shively said — a business that will include merchandising beyond simple sales of premium pot.

"Be looking out for really beautiful vaporizing products," he said. "That will be really hot."